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Comex gold futures trading moderately higherto trade above $3,030/ounce, driven by a weakening dollar and persistent economic/geopolitical uncertainties, despite indications of less severe US tariffs. While President Trump's "reciprocal tariffs" are expected to be less punitive than initially projected, with potential country exclusions, concerns remain. Chinese Premier Li Qiang emphasized China's readiness for tariff impacts, and Australian Treasurer Jim Chalmers highlighted the "seismic" global economic risks posed by US policies. Geopolitical tensions, including a US delegation's push for a Black Sea ceasefire and the Israel-Gaza conflict, further bolstered gold's safe-haven appeal. On the monetary policy front, the Fed kept its key interest rate steady last week but signaled it may cut rates twice this year, reinforcing gold’s long-term bullish outlook.

WTI crude oil edged higher to approximately $68.8 per barrel, influenced by conflicting market signals. New U.S. sanctions targeting Iranian exports created upward price pressure, offset by potential increased Russian supply should ceasefire talks with Ukraine succeed. Market volatility persisted due to impending U.S. tariffs, despite indications of a more targeted approach than initially feared. The oil market, having declined over 10% from January's peak, navigates complex geopolitical tensions. Specifically, the sanctions on Iranian entities are anticipated to reduce immediate oil flows to China, though workarounds are expected to mitigate the long-term impact. The interplay of these factors is shaping near-term oil price dynamics.

LME base metals are trading strong, with most LME metals gaining over 1%, except aluminium, which rose modestly by 0.40%. Copper surged past $10,000/tonne, driven by supply concerns and speculation over impending U.S. tariffs. The premium for U.S. copper over its LME counterpart neared record highs as traders redirected shipments from Asia to the U.S. to capitalize on price advantages and mitigate tariff risks. China’s demand remained firm, supported by rising manufacturing activity and stimulus measures. Meanwhile, tightening Asian copper markets signaled global supply dislocation, with China’s Yangshan premium nearly doubling this month. Falling imports and easing Chinese inventories stoked concerns of further drawdowns during peak demand season.

European natural gas fell as much as 2% weigh down by anticipation of Russia-US talks regarding a potential Ukraine ceasefire. Market speculation suggests a peace accord could restore Russian gas supplies to Europe. Discussions in Riyadh, involving Ukrainian and US officials, focused on a tentative agreement to protect energy infrastructure, though its impact on broader peace negotiations remains uncertain. The European gas market faces supply constraints post-Russia-Kyiv transit deal expiry, with storage levels declining. Recent warmer weather has provided temporary relief. Traders are also monitoring EU deliberations on storage refill regulations.

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